Legislative Update

Wednesday, July 13, 2016
July 13, 2016 Legislative Update

Charlotte Chamber Remained Diligently Focused on Job Creation Agenda

The 2016 General Assembly may have been “short” but during the 68 jam-packed days of the
legislature, the Charlotte Chamber worked around the clock to advance our job creation package.
Your chamber reviewed and tracked all pieces of legislation introduced, while advocating for all policies affecting the state’s economic competitiveness for job creators.  Review a summary of legislation tracked during the session.

Below is a summary of highlight of legislation passed from the Charlotte Chamber’s legislative agenda:

The Charlotte Chamber creates competitive advantage by growing the economy, advocating pro-business public policies and delivering innovative programs and services.

Job Creation

  • Crowdfunding: Legalization for entrepreneurs and investors to engage in crowdfunding opportunities.
  • International Job Recruiting: Establishment of a new International Recruiting Coordination Office within the Department of Commerce.
  • Travel & Tourism Marketing: Budget appropriation of $1 million for the Department of Commerce to use for marketing and advertising to promote state economic development.
  • Natural Gas Infrastructure: Allows natural gas companies to permit extension fees for economic development projects.
  • Intellectual Property: Statutory clarification that NC employers are the owners of company created inventions.
  • Film Grants: Extension of the $30 million grant for the film industry for one year.
  • Unemployment Insurance (UI) Reforms: Delay of UI tax increase on employers.
  • JDIG: Budget specifications to appropriate funds needed to make JDIG requirements and revisions to the economic tier formula for inter-tier cooperation projects.
  • Connect NC Bonds: Funding for administration of the Connect NC Bond.
  • Coal Ash Reform/Energy Costs: Permits the state to pursue safe and affordable options for the state’s coal ash basins.


  • Income/Small Business Tax Reforms: Standard deductions for personal incomes taxes were increased from $15,5000 to $16,500 (joint filers) and $7,750 to $8,750 (single filers)
  • Sales Tax Reform: Implementation of a grace period for employers subject to the state sales tax changes covering repair, installation and maintenances of tangible personal property.
  • Market-Based Sourcing: Postponement on market-based sourcing tax rules, directing the Department of Revenue to implement rules IF legislation is passed. The current tax code allocated income based on where the income-producing activity occurs, under market-based sourcing, the tax would be determined where the benefit of the service is received.


  • Strategic Transportation Investment Law (STI)-Appropriation of $32 million in new funds allocated to STI.
  • DOT Reforms: Changes to current transportation, motor vehicle, and driving laws. The bill includes changes to commercial driver’s licenses, remote renewal for drivers licenses, bicycle safety laws, and inspection requirements for pre-1981 vehicles. In response to the recent NC Supreme Court ruling, the bill also made adjustments to the Map Act, including a one-year moratorium on new maps under the Map Act.

Regulatory Reform

  • Information Technology (IT) Contractors & Liability: Limits IT contractor liability thresholds to federal government and surrounding state standards.
  • Agricultural Reform: Adopts provisions regarding pollution control of sedimentation and ends a permitting requirement for certain installations, repairs, and alterations of farm and residential buildings.
  • Land-Use: Adjustments to city and county land use regulations, local zoning ordinances, and other North Carolina land use laws. The bill includes performance guarantees as well.


  • Online Data: Restrictions on the release of student data by independent educational applications, except for permissible or with the consent of individual parents.
  • Salary Statistics: Requirements for the North Carolina State Education Assistance Authority to provide employment and salary statistics for different majors offered at public and private colleges and universities. The legislation is aimed at providing students and families with access to information to assist them in selecting a major.



Posted by: Kerri A. Burke, McGuireWoods Consulting LLC @ 12:00:00 am  Comments (0)
Monday, July 11, 2016
July 11, 2016 Legislative Update

Dust Settles After General Assembly Adjournment, What Happened?

The General Assembly adjourned during the late evening of July 1st with a flurry of action. Following adjournment, Governor Pat McCrory has 30 days to sign or veto all bills that made it to his desk prior to adjournment. If the Governor fails to take action after 30 days, the bill becomes law.


What Passed?


The House and Senate reached a final agreement on HB 1030: 2016 Appropriations Act. The budget has been sent to the Governor for his approval. Click here to read more about the final budget agreement.


HB 242: Various Charter School Law Changes makes changes to laws governing charter schools. Among the provisions, the bill amends the charter school approval process, performance grading system, and enrollment.

In early June, the Governor signed HB 632: Student Online Protection Act into law. The law restricts the release of student data by independent educational applications, except for permissible or with the consent of individual parents.

HB 1080: Achievement School Districts establishes an Achievement School District pilot, which will include five of the qualifying low-performing schools in the state.

SB 536: Students Know Before You Go & Central Resid. requires the North Carolina State Education Assistance Authority to provide employment and salary statistics for different majors offered at public and private colleges and universities. The legislation is aimed at providing students and families with access to information to assist them in selecting a major.

Employment Law

As an effort to calculate the number of veterans in the state, SB 105 : Report No. Veterans Filing Tax Returns requires the Secretary of Revenue to collect information on the number of individuals in the state that identify as a veteran on their tax return. The findings will be reported to the Department of Military and Veterans Affairs.

SB 482: LLC Clarifications & Emp. Invention Ownership makes technical adjustments to the Limited Liability Company Act and clarifies an employee’s and the employer’s rights to an invention created by the employee during employment.

Energy & Environment

The House and Senate approved HB 630: Drinking Water Protection/ Coal Ash Cleanup Act last week. Among its provisions, HB 630 repeals the Coal Ash Management Commission, and mandates Duke Energy to provide permanent sources of drinking water to those affected by coal ash.

SB 673: Natural Gas/ Econ Dev./Infrastructure will allow natural gas companies to recoup line extension fees if they meet certain economic development thresholds. The company must propose to or have invested a minimum of $200 million, and employ at least 1,500 individuals to be eligible.

SB 770: Farm Act of 2016 includes provisions regarding pollution control of sedimentation and ends a permitting requirement for certain installations, repairs, and alterations of farm and residential buildings.

HB 483: Land-Use Regulatory Changes makes adjustments to city and county land use regulations, local zoning ordinances, and other North Carolina land use laws. The bill includes performance guarantees as well.


SB 726: Internal Revenue Code Update, which was signed by the Governor in June, conforms state law to federal legislation, Protecting Americans from Tax Hikes Act of 2015. SB 726 does not, however, implement all of the federal tax deductions, such as deductions on mortgage insurance premiums and college and university tuition expenses.

The House and Senate passed legislation making technical changes to North Carolina’s revenue laws. SB 803: Rev Laws Technical, Clarifying, & Admin. Chg. makes clarifying adjustments to various income, sales, and local tax statutes. The legislation is an effort to clarify the application and exemptions under current tax law.

The Governor signed SB 807: Conform Full-payment Check Law to UCC into law late last month. The bill, which was recommended by the General Statutes Commission, removes an exception to the 90-day repayment option for claimants of debt, and brings state law in compliance with the Uniform Commercial Code.

Health & Human Services

The General Assembly passed SB 838: Medicaid Transformation Modifications. The bill adjusts the 2015 law HB 372: Medicaid Transformation & Reorganization, by making various clarifying changes to the law and implements recommendations made by the NC Department of Health and Human Services.

HB 842: Medicaid Waiver Protections/ Military Families will allow dependents of an active duty service member to keep their Medicaid waiver eligibility status when the service member is transferred to a different state. The dependent of the service member can keep their eligibility status as long as they keep legal residence in North Carolina.


HB 287: Amend Insurance Laws was signed into law by the Governor last week. The bill places a 15% cap on long-term insurance policies, instructs the Department of Insurance to construct a private market for flood insurance, as well as other statutory changes.

Information Technology

SB 792: State IT Contracts/Contractor Liability limits the liability of state contractors. The legislation puts a cap on the liability to no more than two times the amount of the contract. The bill requires that all contracts include the amount of liability that the contractor will assume as well.

SB 805: Fiduciary Access to Digital Assets was signed into law in June. The law allows for disclosure of an individual’s digital assets, such as social media accounts, online banking, and other online accounts, to a trustee, fiduciary, personal representative, or guardian.

SB 814: Designate State CIO as Secretary of Dept. changes the title of the Chief Information Officer to the Secretary of the Department of Information Technology, and states that the Secretary is an appointed position by the governor and a member of the governor’s cabinet.

Justice & Public Safety

Signed into law last month, HB 958: Felony Death Impaired Boating/Sheyenne’s Law increases the penalty for inflicting serious injury or death while operating a boat while impaired. The law goes into effect on December 1, 2016.

HB 972: Law Enforcement Recordings/ Not Public Record, establishes the first statewide policy for the release of state and local law enforcement recordings, such as body camera footage.

HB 1021: Amend Sex Offender Certain Premises adjusts state law to comply with the Supreme Court’s decision in Doe v Cooper. The legislation prohibits sex offenders from being in a place frequently inhabited by minors when minors are present, and prohibits sex offenders on the state fairgrounds during the annual state fair.

State & Local Government

In the final hours of the short session, legislators approved an adjustment to HB 2: Public Facilities Privacy & Security Act. The adjustment, which was included in HB 169: Restore the State Claim for Wrongful Discharge, restores the ability for people to bring discrimination claims to state court and not just federal court. The legislation also reduces the statute of limitations from three years to one.

HB 805: Measurability Assessments/ Budget Tech. Corr. creates a measurability assessment program to provide for independent analyses of state government programs, as well as makes various technical changes legislation, including the state budget, including an allocation $500,000 in state funds to support the state’s litigation defense for HB 2: Public Facilities Privacy & Security Act.

SB 326: Local Gov'ts/Bldgs/Structures/Inspections modifies local government law regarding the inspection of residential buildings. The bill includes provisions that deal with reasonable cause for inspection, property permits, and allowing the sheriff and city police to assist the land lord in addressing crimes committed on private property.

In three unrelated provisions, SB 481: Fund Sm Business/DOR Rulings/City Rt of Way will allow North Carolinians to purchase equity or debt from in state issuers, requires the NC Department of Revenue to publish summaries of private letter rulings on their website within 90 days of written determination, and prohibits cities from charging fees for utility use of right-of-way in most situations.

SB 575: NC/SC Original Boundary Confirmation was signed into law in June and reestablishes the border between North and South Carolina. South Carolina passed similar legislation this year, too.

The House and Senate approved SB 667: Elections Omnibus Revisions last week. The bill will make several changes to current elections law, including mandating the Attorney General to represent the state in legal challenges regarding both state and local elections law, and allows the General Assembly’s Program Evaluation Division to study the implementation of moving municipal elections to even-numbered years.


HB 959: DOT Proposed Legislative Changes makes changes to current transportation, motor vehicle, and driving laws. The bill includes changes to commercial driver’s licenses, remote renewal for drivers licenses, bicycle safety laws, and inspection requirements for pre-1981 vehicles. In response to the recent NC Supreme Court ruling, the bill also made adjustments to the Map Act, including a one-year moratorium on new maps under the Map Act.


What Didn’t Pass?


HB 657: Math Standard Course of Study Revisions would have reinstated the “traditional” math course track as an option for students. Had the bill passed both chambers, the legislation would have mandated that public high schools offer the integrated math sequence, Integrated I, II, and III, as well as the traditional sequence of Algebra I, Geometry, and Algebra II.

SB 53: Private Alternative Teacher Preparation was an effort to create alternative lateral entry programs for teacher preparation. The legislation was aimed at bringing qualified individuals into teaching from other professions.

SB 554: School Building Leases intended to address school facility issues in rural areas by allowing local school boards to enter into agreements with private developers to construct and lease facilities.

Among its provisions, SB 867: Protect Students in Schools would have implemented finger print background checks for all applicants for teaching positions in the state.

Energy & Environment

For the first time since 2011, the legislature failed to pass a comprehensive regulatory reform bill. Both SB 303: Regulatory Reform Act of 2016 and HB 593: Amend Environmental & Other Laws were approved by both chambers and made it to conference committees in order to work out differences between the two chambers, but nothing resulted from the committees. A third regulatory reform bill, HB 169, was stripped of its language hours before adjournment, and was replaced with adjustments to HB 2.

HB 763: Military Operations Protection Act of 2016 would have adjusted the permitting process for wind energy facilities. The bill would have mandated that permits for the construction of wind energy facilities would have to be approved by the Department of Military and Veterans Affairs. The legislation was an effort to protect the flight training paths around North Carolina’s many military installations.


SB 826: Prosperity & Economic Opportunity for all NC Act would have increased access to capital and tax credits for entrepreneurs across the state. The bill was directed at assisting Tier 1 and 2 counties, which are the more economically distressed areas of the state.

Health & Human Services

HB 821: Proper Administration of Step Therapy would have mandated health insurance companies to create a step therapy program for the administration of medicine. After receiving several hearings in House committees, the bill’s primary sponsor, Rep. David Lewis (R-Harnett), chose to pull the bill for the rest of the session.

Additionally, the Senate Health Care committee discussed a bill draft that would have repealed the state’s certificate of need law, but was never voted on by the committee.

State & Local Government

HB 3: Omnibus Constitutional Amendments failed to pass through both chambers in the final hours of session. The bill would have put three constitutional amendments on November’s ballot: limiting eminent domain for public use only, capping the income tax at 5.5%, and declaring hunting and fishing a constitutional right.

HB 100: Local Government Immigration Compliance would have implemented penalties for municipalities and counties that failed to comply with federal immigration laws. If a municipality or county were found to not be in compliance with federal immigration law, the state could withhold funds for school and road construction among others.

In the final hours of session, a federal court ruled that the voting districts for the Wake County Board of Commissioners and Board of Education, modified by state law in 2015, are unconstitutional. Leaders in both chambers stated that there was not enough time to address the Wake County maps before adjournment. The Wake County Board of Elections, as the defendant in the case, has been meeting this week to decide whether they will appeal the court's decision or will find a way to comply. Until this is solved, it leaves the maps in limbo for the November election.


In early June, the House passed HB 954: Terminate Agreement for Tolling of I-77, which would have terminated the contract between the state and Cintra, the company contracted to construct toll lanes on I-77, outside of Charlotte. Ultimately, the bill was never approved by the Senate. 


Posted by: Kerri A. Burke, McGuireWoods Consulting LLC @ 12:00:00 am  Comments (0)
Wednesday, July 6, 2016
July 6, 2016 Legislative Update

General Assembly Adjourns “Short Session”…

The North Carolina General Assembly had a strong push towards the finish line last week, and met their self-imposed deadline, adjourning late June 1st.  The last week of session was a flurry of action, including finalization of the state budget and bills. Several large bills passed during the final week, while several died at the 11th hour.

House & Senate Pass State Budget Adjustments

The General Assembly passed, HB 1030: 2016 Appropriations Act before adjourningThe Senate signed off on the agreement on Wednesday, on a vote of 36-14, with all Republicans and two Democrats voting for the proposal. With 19 House Democrats voting with the Republicans, the House approved HB 1030 on a vote of  91-22. The budget is currently on the Governor’s desk for his review.

The $22.34 billion budget includes:

State Employee Raises:

  • Average 4.7% teacher salary raises.
  • 1.5% pay increases and a .5% bonus for all state employees, plus a merit pay fund to be distributed based on performance.
  • 6% one-time bonuses for state retirees.

Agriculture & Natural Resources:

  • $8.6 million to the Clean Water Management Trust Fund.
  • $250,000 to increase the availability of fresh agricultural products in food deserts.


  • $34.8 million for Opportunity Scholarship Reserve Fund.
  • $4.7 million for the implementation of the digital learning plan.
  • $6 million to implement HB 1080: Achievement School District, which passed the legislature earlier this week.
  • Various changes to the rules governing virtual charter schools teaching staff, testing and withdrawal rates.

Health & Human Services:

  • $250,000 for the NC MedAssist pharmaceutical program.
  • Establishes the Healthy Out-of-School Time Recognition Program.
  • Implements a Medication-Assisted Opioid Use Disorder Treatment Pilot Program.
  • Moves up the repeal date of the Certificate of Public Advantage (COPA) law to September 30, 2016, originally was January 1, 2018.

Information Technology:

  • Directs the Department of Information Technology to plan and design and implement an enterprise resource planning system.


  • Increases the zero tax brackets for personal income tax.
  • Expands taxation on mill machinery.
  • Enacts Market Based Sourcing.
  • Modifies Repair Maintenance Installation..


  • Provides an additional $32 million in recurring funding for Strategic Transportation Investments.
  • Removes $500,000 funding cap for lightrail projects, with additional restrictions.
  • Revises the Department of Transportation bidding process. 

Click here to read HB 1030 and the accompanying Money Report.

I-77 Managed Lanes Project to Continue
A bill that sought to terminate the contract between the state and Cintra in building a toll lane on I-77 outside of Charlotte has died for the year. HB 954: Terminate Agreement for Tolling of I-77, sponsored by Reps. Charles Jeter (R-Mecklenburg), Mike Hager (R-Rutherford) and John Bradford (R-Mecklenburg), passed the House earlier this month by an 81-27 vote, but will not be moving in the Senate this year after the Senate Republican Caucus announced that they voted to not move the bill forward this year. It is still possible that similar legislation could surface in next year’s long session.  With the adjournment of this year’s session, all bills calling for the cancellation of the contract are dead for this session including HB 950 introduced by Rep. Tricia Cotham (R-Mecklenburg).                                

Constitutional Amendments

The Senate introduced a committee substitute to HB 3: Omnibus Constitutional Amendments, which would place the following amendments on the ballot November 2016 ballot:

  • Eminent Domain: would provide that private property shall not be taken as eminent domain except for public use and that any party may request a jury to determine and ensure just compensation.
  • Taxpayer Protections: would cap the state income tax rate at 5.5% and provide for the establishment of an Emergency Savings Reserve Fund.
  • Right to Hunt, Fish, and Harvest Wildlife: would protect the people’s right to hunt, fish, and harvest wildlife in the state. The amendment would have no bearing on existing hunting, fishing, or firearms law.

The Senate approved the legislation but the House did not take up the bill before adjourning.

Education Policy Changes Debated Before Adjournment

Numerous education related bills were considered before adjourning, including:

HB 1080: Achievement School Districts received final approval from both chambers this week after the Senate made several changes. The bill, which is sponsored by Reps. Rob Bryan (R-Mecklenburg), Cecil Brockman (D-Guilford), and John Bradford (R-Mecklenburg), will allow private charter school companies to take over some of the state’s lowest performing public schools.

The changes made by the Senate include:

  • Directs the State Board of Education to authorize the Charlotte-Mecklenburg Board of Education to create an innovation zone to include up to five low-performing area schools.
  • Clarifies that, after five years of operation, the State Board of Education can extend the contract with the Achievement School operator for an additional three-year term if the school remains a qualifying school, but has exceeded the average annual growth of other achievement schools and has shown academic growth over the period of the contract.
  • Removes the principal turnaround model from the bill.

The bill has been sent to the Governor for his signature.

HB 1074: Schools/ CC Facilities Test for Lead, which is sponsored by Reps. Mike Hager (R-Rutherford), Rob Bryan (R-Mecklenburg), Justin Burr (R-Stanly) and Charles Jeter (R-Mecklenburg), resurfaced in the House this week with numerous changes. The legislation would require the drinking water in all public schools and child care facilities constructed before 1987 to be tested for lead. The legislation also allows the state to test the water in public swimming pools and water recreation attractions; this addition was made after a teenager succumbed to a rare waterborne amoeba after participating in a whitewater rafting excursion in Charlotte. The bill unanimously passed the House but did not pass the Senate.

If passed, SB 554: School Building/ Leases, sponsored by Sens. Wesley Meredith (R-Cumberland), David Curtis (R-Lincoln) and Jerry Tillman (R-Randolph) would allow local boards of education to consolidate rural schools in order to reduce costs. Additionally, the bill includes a provision which would require the State Board of Education to provide decisions on fast-track replication applications for successful charter schools within 120 days. The bill did not pass the House.

A bill that unanimously passed the Senate in early June received updates within the House Finance committee. SB 867: Protect Students in Schools, primarily sponsored by Sen. Chad Barefoot (R-Wake), passed the Senate as a bill that would require criminal background checks for teacher licensure and school personnel employment. While that part of the bill still exists, the House added the following provisions:

  • Also requires board members of nonprofits seeking approval to establish a charter school from the State Board of Education to go through a background check.
  • Requires the State Board of Education to create a database for certain school personnel to report catastrophic illnesses and injuries and concussions involving student athletes.
  • Eliminates low voltage building permit requirements for passive optical networks.
  • Encourages partnerships for digital learning.
  • Requires the State Board of Education to make fast-track replication decisions for charter schools within 120 days. (This provision is also sitting in SB 554, mentioned above.)

The House did not pass the bill before adjourning.

Coal Ash Revisions Pass…Senate Leaves Natural Gas Incentives & Farm Act

The legislature had complex debates on environmental and energy related bills before adjourning:

HB 630: Drinking Water Protection/ Coal Ash Cleanup Act was introduced as a Senate substitute in committee. The legislation does the following:

  • Requires permanent water sources be provided to residents effected by coal ash, at the cost of Duke Energy.
  • Repeals the Coal Ash Management Commission.
  • Modifies the closure requirements for coal ash impoundments, to provide closure methods believed to be less costly to both consumers and Duke Energy.
  • Modifies appointments to both the Mining and the Oil & Gas Commissions.

The bill passed the House and Senate and is currently on the Governor’s desk.

A bill that was introduced as a committee substitute in the House last week, SB 673: Natural Gas/ Economic Development, received approval from the House. The bill provides incentives to natural gas utility companies for the construction of economic development projects in areas where the project would otherwise not be economically feasible. The legislation also lays out the requirements for eligible economic development projects, including that the business:

  • Provides opportunities for natural gas usage and jobs.
  • Invests at least $200 million in private funds to improve or develop property in the area.
  • Employs 1,500 full time employees, and satisfy a wage standard in which employee wages equal at least 110% of the average wage for all private employers in the county.

The bill did not pass the Senate before adjourning.

The Senate voted to concur on the changes made in the House to SB 770: Farm Act of 2016 The House debate was primarily centered on a provision in the bill that extends the sunset for a tax credit for the construction of a renewable fuel facility in Sampson County. The House made several other changes to the bill, addressing cervid feed, sedimentation pollution control, and interconnection requests between public utility distribution systems and renewable energy facilities. The Senate did not pass before adjourning.

House Leaves Step Therapy Changes Until Next Session

In the House Committee on Rules, Rep. David Lewis (R-Harnett), announced that he would be dropping HB 1048: Reduce Barriers to Improve NC Health & Safety from consideration this year. The bill, which is also sponsored by Reps. Darren Jackson (D-Wake),Gregory Murphy (R-Pitt) and John Dobson (R-McDowell), would have:

  • Provided that health benefit plans may only impose prior authorization on abuse deterrent opioids if the same protocol is taken with a non-abuse deterrent counterpart.
  • Required that the patient and prescribing practitioner  have access to a clear and convenient process for requesting a step therapy override determination, sets out four conditions under which an override determination request be expeditiously granted and requires that when an override determination is granted, the health plan authorize coverage for the drug if it is a covered prescription.

Rep. Lewis announced that the legislation had shed light on the issue of step therapy, and that similar legislation is likely in the upcoming year.

HB2 & Budget Technical Corrections

HB 805: Measurability Assessments/ Budget Tech. Corr., sponsored by Reps. Hugh Blackwell (R-Burke) and Marilyn Avila (R-Wake), includes the following changes:

  • Appropriates $500,000 for the state’s defense of HB 2: Public Facilities Privacy & Security Act
  • Amends a provision in the budget concerning lab school funding, and provides for equal per-pupil funding except for the allocation for children with disabilities, limited English proficiency and for transportation services.

In addition, the House and Senate passed a proposal dealing with HB2, within HB169, that reinstates the right to sue for discrimination claims in state courts, revising the state of limitations to one year, instead of three years. 

House & Senate Pass MAP Act Changes

Both the House and Senate adopted the conference report to HB 959: DOT Proposed Legislative Changes, which is sponsored Reps. Frank Iler (R-Brunswick) and John Torbett (R-Gaston). The conference report includes the following changes:

  • Addresses the Map Act in accordance with the recent state Supreme Court decision. The legislation rescinds all current maps, places a one year moratorium on creating new maps under the act, changes rates from 8% to prime rates, and creates a study for how to move forward.
  • Various changes to automobile and moped insurance regulation.
  • Decreases the minimum age required to operate an unmanned aircraft system for commercial purposes from 17-years-old to 16-years-old.
  • Deletes a proposed revision to allow the Freight Rail & Rail Crossing Safety Improvement Fund to be used for the enhancement of short-line railroad assistance.
Posted by: Kerri A. Burke, McGuireWoods Consulting LLC @ 12:00:00 am  Comments (0)
Monday, June 27, 2016
June 27, 2016 Legislative Update

General Assembly Wraps Up Short Session, Budget Negotiations Final?

As the end of the short session swiftly approaches, last week at the General Assembly was characterized by the telltale signs of adjournment: budget negotiations, an influx of proposed committee substitutes, and long days of legislative activity. The Senate held a full day of meetings last Friday, an irregular event for a Friday, in an attempt to complete committee work expeditiously. The House and Senate remains committed to enjoying Independence Day fireworks from their home counties.

The budget conference process, which began two weeks ago, has apparently wrapped up. Over the weekend, sources have claimed that final budget negotiations were completed on Saturday. It is expected that the final budget document will be made public and posted sometime this evening.

I-77 Bill, Not Moving in the Senate
A bill that sought to terminate the contract between the state and Cintra in building a toll lane on I-77 outside of Charlotte has died for the year. HB 954: Terminate Agreement for Tolling of I-77, sponsored by Reps. Charles Jeter (R-Mecklenburg), Mike Hager (R-Rutherford) and John Bradford (R-Mecklenburg), passed the House earlier this month by an 81-27 vote, but will not be moving in the Senate this year after the Senate Republican Caucus announced that they voted to not move the bill forward this year. It is still possible that similar legislation could surface in next year’s long session.

Several Regulatory Reform Measures Move Forward

Regulatory Reform Act of 2016

The Senate failed to concur on the changes made by the House on SB 303: Regulatory Reform Act of 2016 on Tuesday. The legislation was introduced as a proposed committee substitute in April. A conference committee may still be appointed to work through the differences between the two chambers’ version of the bill.

Occupational Licensing Boards

On Wednesday, the Senate Committee on Finance discussed a proposed committee substitute to HB 1007: Amend Occupation Licensing Board Statutes, which is sponsored by Reps. Jonathan Jordan (R-Watuga), Sarah Stevens (R-Surry) and Rob Bryan (R-Mecklenburg). The PCS includes the original provisions of Rep. Steven’s bill, which responds to the decision of North Carolina State Board of Dental Examiners v. Federal Trade Commission and clarifies the educational requirements for barber registration, and additional provisions. Additionally, the proposed committee substitute:

  • Clarifies the requirements for licensure as a professional engineer.
  • Amends certain laws related to the North Carolina Medical Board.
  • Increases the time for certification of chiropractic clinical assistants.
  • Increases the fee for real estate broker license applications.
  • Amends current law regarding dispensing optician examination qualifications.

2016 Farm Act

SB 770: NC Farm Act of 2016, sponsored by Sens. Brent Jackson (R-Sampson), Andrew Brock (R-Davie) and Bill Cook (R-Currituck), passed through the Senate on Monday, and was reviewed by the House Committee on Agriculture yesterday. The bill includes the following provisions:

  • Excludes minor repairs from building permit requirements.
  • Provides enforcement authority for the Department of Agriculture and Consumer Services (DACS) for the program governing improperly sanitized, made or tagged bedding.
  • Enacts an Agricultural Emergency Response Act and authorizes DACS to deploy response teams in emergencies.
  • Directs DACS to inspect the building, grounds and equipment of animal product rendering plants.
  • Allows local school boards to develop and implement policies to purchase locally grown food for cafeteria programs.

The bill will be voted on by the House Committee on Agriculture on Tuesday.

Environmental Law Amendments

Last week, the Senate passed a bill that includes numerous amendments to current environmental and non-environmental law. HB 593: Amend Environmental & Other Laws, sponsored by Rep. Pat McElraft (R-Carteret), has been sent back to the House for concurrence to the changes made by the Senate. While in the Senate, the previous contents of the bill were replaced. The Senate committee substitute includes the following changes:

  • Makes changes to the franchise agreements between local governments and the construction and operation of a sanitary landfill.
  • Deletes a proposed revision to current law concerning agriculture employment status and union or nonunion status.
  • Deletes a proposed revision which delayed the insurance requirement for moped owners.

Senate Passes UNC & Capital Improvement Projects

Last week, the Senate voted 43-1 on SB 872: UNC Self-Liquidating Projects, a bill sponsored by Sen. Tom Apodaca (R-Henderson). SB 872 authorizes five UNC institutions to finance a total of ten capital improvement projects on their campuses without an appropriation from the General Fund.

The projects include building and renovating housing, student and wellness centers, academic and administrative buildings, and other capital improvements at Appalachian State University, North Carolina Central University, North Carolina State University, University of North Carolina at Charlotte and UNC Hospitals at Chapel Hill. The bill has been sent to the House for consideration.

House Passes Body Camera Regulations

A bill that would create the state’s first regulations of body-worn cameras, HB 972: Law Enforcement Recordings/ No Public Record, passed the House last week by a 87-19 vote. The bill, which is sponsored by Reps. John Faircloth (R-Guilford), Allen McNeill (R-Randolph), Jamie  Boles (R-Moore) and Pat Hurley (R-Randolph), provides that recordings made by law enforcement agencies are not public record, and establishes the process in which records can be requested and obtained.

Several changes have been made to the legislation during its consideration in the House. The changes primarily clarify how an individual can request a recording, and the process to appeal a rejected request. The bill will receive its final approval from the House on Monday night.

Several Omnibus Local Government Proposals Considered

Numerous bills affecting local governments were considered last week, including:

HB 100: Local Government Immigration Compliance, which was introduced in the Senate by Sen. Norman Sanderson (R-Pamlico), creates a process for the attorney general to investigate allegations of a local government not complying with state immigration laws. Under the legislation, local governments found to be out-of-compliance could lose state funding for schools and roads.

HB 483: Land-Use Regulatory Changes, a bill which was considered last year during the long session, resurfaced this week in the Senate. The bill, which is sponsored by Rep. Jonathan Jordan (R-Ashe), makes numerous changes to land-use laws. The bill passed Senate Commerce last week and has a serial referral to Senate Rules.

HB 407: Housing Authority Transfers, was introduced in the Senate Committee on State and Local Government last week, and it will allow municipalities to transfer a housing authority to a regional council of government.

HB 1035: LGC/ Training for Local Government Finance Officers, sponsored by Reps. Allen McNeill (R-Randolph), Linda Johnson (R-Cabarrus) and Frank Iler (R-Brunswick), would require basic financial training for finance officers of local governments and public authorities. 

SB 803:  Revenue Law Technical, Clarifying & Administrative Changes, which passed the Senate last week, makes numerous changes to the state’s revenue laws, including a section which allows the city and the county it is in to exchange tax information with one another to administer taxes. The bill has been referred to the House Committee on Finance.


Posted by: Kerri A. Burke, McGuireWoods Consulting LLC @ 12:00:00 am  Comments (0)
Monday, June 20, 2016
June 20, 2016 Legislative Update

House and Senate leaders continue to pass legislation regarding regulatory reform, tax and economic development, healthcare, and education. Budget negotiations between the two legislative bodies continue as well, and many expect an adjournment resolution within the next two weeks.

Senate & House Negotiate Tax Reform Provisions

Tax Cap

Senate finance leaders are proposing a bill that could constitutionally limit future income tax increases. Sens. Bill Rabon (R-Brunswick), Jerry Tillman (R-Randolph) and Bob Rucho (R-Mecklenburg) are the sponsors of SB 817: Constitutional Amendment-Max Income Tax Rate of 5.5%. If the bill is signed into law, voters will have the opportunity to vote on the constitutional amendment to limit the state income tax to 5.5%. Currently, the state constitution does not permit an income tax rate higher than 10%.  The bill is on the Senate calendar for June 25 for an unusual Saturday session, another indication that the session is coming to a close.

Proposed Tax Changes

On Thursday, the House Finance Committee discussed a bill draft that would make several changes:

  1. Clarifies the application of the sales and use tax on repair, maintenance, and installation (RMI) services.
  2. Enacts the NC New Markets Jobs Act, which provides a state-level tax credit for equity and debt investments in Tier 1 or Tier 2 counties that qualify for the federal New Markets Tax Credit.
  3. Allows local governments to exchange tax information for purposes of administering taxes.
  4. Exempts from sales and use tax materials that are used in an accepted wastewater dispersal system.

The bill, which will be titled HB 994: Sales Tax of RMI Clarified/Other Tax Changes, will be negotiated as the House and Senate finalize the final budget.


The Senate Finance Committee reviewed SB 481:Fund Small Businesses/Publish DOR Rulings on Wednesday. The bill would allow small businesses to raise funds through crowdfunding (raising funds from multiple people such as friends or family) which has been made very popular through the internet. The second half of the bill will require public disclosure of all written determinations made by the NC Department of Revenue. The bill is sponsored by Sens. Tamara Barringer (R-Wake), Ralph Hise (R-Mitchell), and Rick Gunn (R-Alamance).

Several Regulatory Reform Packages Advance

Environmental Amendments

Last week the Senate introduced a new version of HB 593: Amend Environmental & Other Laws. Among its 23 sections, HB 593 would prohibit cities from charging fees for utilities’ use of right-of-way, require the Division of Coastal Management to study the current long-term erosion rates adjacent to terminal groins, and make changes to storm water regulation. The bill passed the Senate Agriculture/Environment/Natural Resources Committee on Thursday and will now be heard in Senate Finance.

Farm Act

On Monday, the Senate will be debating SB 770: NC Farm Act of 2016 on the floor. Among other provisions, SB 770 would establish the "Agricultural Emergency Response Act," exempt certain minor repairs from building permit requirements, and would also create a voluntary assessment on deer feed.

Flight Paths/Military

Sen. Harry Brown (R-Onslow) introduced legislation on Wednesday that would increase regulations on the wind energy industry. The bill would limit how close a wind farm can be to a military base or installation. The legislation, HB 763: Military Operations and Protection Act of 2016, would require permits for wind farms to be approved by the NC Department of Military & Veterans Affairs and the NC Department of Health & Human Services. Supporters of the legislation say that the bill is necessary to protect the state’s many military installations from another round of base realignment. Proponents also state that the wind energy towers would provide significant safety hazards for pilots training in the airspace near many of NC’s military installations. However, those in the wind energy industry vehemently oppose the bill, which they say will kill two potential projects in the state in Tyrell and Perquimans Counties. The bill passed its second reading on the Senate floor Thursday.

Online Legal Documents

The House and Senate passed legislation this week that would clarify the definition of the practice of law. The legislation, HB 436: Unauthorized Practice of Law Changes, is the result of a court case settled between the State Bar and Legal Zoom last year. The bill will allow online websites to provide legal documents, pending the review of an attorney that is licensed in North Carolina. The bill, sponsored by Reps. Leo Daughtry (R-Johnston), Rob Bryan (R-Mecklenburg), and Ted Davis (R-New Hanover), will be sent to the Governor for his approval.

Omnibus Regulatory Reform Legislation

The House and Senate are both working on legislation to reduce restrictions and regulations on businesses. On Tuesday, the Senate approved HB 169: Regulatory Reduction Act of 2016. Yesterday, the House passed a competing measure, SB 303: Regulatory Reform Act of 2016, out of their chamber. Since both bills received major modifications in the opposite chambers, it is likely that these bills will both go to conference committee, where one compromise measure will likely be the result.

Department of Transportation, Policy Changes & I-77

Cancelling I-77 Toll Could Cost NC

Nick Tennyson, Secretary the NC Department of Transportation, sent a letter to the Senate Transportation Committee, indicating that the passage of HB 954: Terminate Agreement for Tolling of I-77, which would cancel the proposed toll on I-77, could cost $800 million. If the bill passes, the state would be forced to cancel the contract with Cintra, a Spanish infrastructure and development company, and would have to reconstruct parts of the road. The bill would also cancel a number of other projects in North Mecklenburg. The bill is now in the Senate Transportation Committee.

DOT Proposed Legislative Changes

After passing the House in early June, the Senate followed suit this week and approved HB 959: DOT Proposed Legislative Changes. Provisions within the bill include changes to bicycle safety laws and a requirement for DOT to study fees for broadband and fiber optic in DOT right-of-way. Since the Senate made changes to the House’s version, it will go back to the House for concurrence.

Senate Introduces Certificate of Need Law Changes

On Tuesday, Sen. Ralph Hise (R-Mitchell), introduced a bill in the Senate Health Care Committee that would entirely repeal the state's certificate of need (CON) law. Proponents of the repeal have stated that the law, which requires health care providers to apply to the state to open a new facility or buy a large piece of equipment, such as a MRI machine, drives up health care costs. Opponents of the repeal, however, believe that the CON law keeps the market stable and allows for small and rural hospitals to be able to function as full-time health providers. The bill, which currently reads as HB 161: Adopt State Cat, was not voted on by the committee. Committee leaders said they will take the measure back to the Senate Republican Caucus to further discuss.



Posted by: Kerri A. Burke, McGuireWoods Consulting LLC @ 12:00:00 am  Comments (0)
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